Ulta Beauty beat sales and earnings estimates for the second quarter as it put a year ago, coronavirus-impacted period behind it and started opening Ulta at Target operations.
Net income in the second quarter was $250.9 million, or $4.56 per diluted share, versus $8.1 million, or 14 cents per diluted share, in the year-before period.
Adjusted for one time charges, diluted earnings per share in the 2020 second quarter were 73 cents, with no adjustment made in the 2021 period.
An analyst average estimate published by Yahoo Finance had Ulta’s second-quarter earnings per diluted share coming in at $2.42. Ulta also beat the average estimate for net sales, which was $1.72 billion.
Comparable sales, defined as sales for stores open at least 14 months, including stores temporarily closed due to COVID-19, and e-commerce sales, advanced 56.3% versus the 2020 quarter, driven by a 52.5% increase in transactions and a 2.5% increase in average ticket. Compared to the 2019 second quarter, comparable sales increased 13.1%, according to Ulta.
Net sales increased 60.2% to $1.97 billion in the quarter year over year with stronger consumer confidence and fewer COVID-19 restrictions weighing on revenue. Operating income increased to $332.3 million versus $12.8 million in the 2020 quarter.
In a conference call, Dave Kimbell, Ulta CEO, credited a faster-than-expected recovery in the beauty sector for helping drive the company results, with investments made in the business putting it in a position to capitalize.
He added that Ulta Beauty at Target has launched in 58 of the mass-market retailer’s stores and online with plans calling for continued openings to 100 stores by the end of the current quarter. Ulta Beauty at Target, customers will find a 1,000-square-foot co-design space with bold new fixtures and lighting that celebrate premium beauty with a modern look, he said.
“The Ulta Beauty team delivered strong results for the second quarter,” said Kimbell, in announcing the financial results. “This performance reflects the recovery of the beauty category, investments and choices we’ve made over the last year to adapt to the market disruption and strengthen our leadership position, and the ongoing efforts of our associates to deliver great experiences for our guests. Our value proposition is strong, and we are evolving and innovating to lead in the new beauty landscape, capture additional market share, and drive profitable growth.”
